ISLAMABAD, May 31: A Supreme Court judge on Wednesday observed that even countries wedded to free-market economy observe the universal principle that strategic assets must never be sold to foreigners.

“But we are moving opposite,” said Justice Javed Iqbal, member of the nine-member bench hearing a set of private petitions which have challenged the sale of Pakistan Steel Mills (PSM), the country’s largest industrial complex, for what the petitioners call a ‘paltry sum’ of Rs21.68 billion.

Chief Justice of Pakistan Justice Iftikhar Mohammad Chaudhry, leading the bench, also recalled that courts in Turkey had intervened sometimes back to strike down the privatiation of steel mills on a petition of an organisation of some retired army officers.

“Our difficulty is that we are not ready to learn from the history,” said Barrister Zafarullah Khan of the Watan Party, while concluding arguments to convince the court that the March 31 privatisation of PSM should be set aside for being against the Privatisation Commission’s Ordinance, 2000 and Articles 2A (Objective Resolution), 4 (right of individuals to be dealt in accordance with law), 5 (loyalty to state and obedience to the constitution and law), 11 (slavery, forced labour prohibited), 18 (freedom of trade), 24 (protection of property rights) and 25 (equality of citizens) of the Constitution. The mills was also sold without any reference price besides the bidders did not disclosed about their capabilities at the time of pre-qualification for the privatisation, he deplored.

Referring to advertisements, published in newspapers, inviting bids for the sale of PSM, Barrister Khan argued that the advertisements did not mention anything about the land, but when the mills was sold, the deal also comprised precious land.

At this Justice Tassadduq Hussain Jillani observed that terms of reference of the advertisement for the privatisation never mentioned concessions, granted to the new buyer like clearing PSM’s liabilities and handing over the land to them.

Evaluation reports of the steel mills were also finalized by evaluators on March 30 but every thing including completing mandatory requirements and the sale of the mills were finalized by March 31, Justice Javed Iqbal observed wondering how it could be done in a day.

Barrister Khan also referred to Feb 1, 2005 CDWP (central development working party) minutes wherein it was decided to expand the capacity of steel mills to produce 1.5 million tons of steel per year from the existing 1.1 million tons.

A memorandum of understanding (MoU) was also signed earlier between Pakistan and Russia in this regard, besides it was held that PSM’s chairman and its board of directors (BoD) were competent to carry out improvement and replacement for smooth functioning of the mills.

However on Feb 7, a new BoD was appointed after dissolving the previous one and was directed by the prime minister on Feb 10 to initiate steps for the privatisation of the steel mills in a week.

Representing the Pakistan Steels Workers Union, Advocate Mujeeb Pirzada argued that workers of the PSM were discouraged to bid for the mills by asking them to submit an earnest money of Rs1.8 billion — two per cent of the total price.

“The price becomes Rs90 billion if we calculate it,” he, explained, adding that it suggested that the commission had very much in their minds the worth of PSM.

Still they sold it for peanuts, he said, adding that workers were ready to buy it for Rs24 billion, more than what the consortium bought it for Rs21.68 billion.

Mr Pirzada said that the privatisation of the steel mills was done without constituting the Council of Common Interest (CCI) and claimed that one of the grounds for ousting the respective governments of Benazir Bhutto and Nawaz Sharif were that they failed to convene CCI on matters of privatisation.

At this Justice Iqbal again observed that to review the economic progress of the country was the exclusive domain of CCI — an institution created to safeguard the interests of the federating units — and therefore could not be bypassed.

Mr Pirzada also mentioned that it had cost Rs24 billion to build the mills but was sold for Rs21.68 billion despite realizing that the value of rupee then was much stronger than at present.